IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/21211.html

Strategic Complementarities in a Dynamic Model of Technology Adoption: P2P Digital Payments

Author

Listed:
  • Alvarez, Fernando
  • Argente, David
  • Lippi, Francesco
  • Méndez, Esteban
  • Van Patten, Diana

Abstract

We develop a dynamic model of technology adoption featuring strategic complementarities: the benefits of the technology increase with the number of adopters. We show that complementarities give rise to gradual adoption, multiple equilibria, multiple steady states, and suboptimal allocations. We study the planner’s problem and its implementation through adoption subsidies. We apply the theory to SINPE Movil, a peer-to-peer payment app developed by the Central Bank of Costa Rica. Using transaction-level data and user-specific networks that we construct from administrative records, we causally estimate sizable complementarities. In our calibrated model, the optimal subsidy pushes the economy to universal adoption.

Suggested Citation

  • Alvarez, Fernando & Argente, David & Lippi, Francesco & Méndez, Esteban & Van Patten, Diana, 2026. "Strategic Complementarities in a Dynamic Model of Technology Adoption: P2P Digital Payments," CEPR Discussion Papers 21211, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:21211
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP21211
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Argente & Paula Gonzalez Alvarez & Esteban Méndez & Diana Van Patten, 2025. "Drivers of Digital Payment Adoption: Lessons from Brazil, Costa Rica, and Mexico," NBER Working Papers 34280, National Bureau of Economic Research, Inc.
    2. Riley, Emma & Shonchoy, Abu S. & Osei, Robert Darko, 2025. "Incentives and endorsement for technology adoption: Evidence from mobile banking in Ghana," Journal of Development Economics, Elsevier, vol. 176(C).
    3. repec:bdi:opques:qef_1009_26 is not listed on IDEAS
    4. Cannerozzi, Federico & Ferrari, Giorgio, 2024. "Cooperation, Correlation and Competition in Ergodic $N$-Player Games and Mean-Field Games of Singular Controls: A Case Study," Center for Mathematical Economics Working Papers 691, Center for Mathematical Economics, Bielefeld University.
    5. Nocciola, Luca & Zamora-Pérez, Alejandro, 2024. "Transactional demand for central bank digital currency," Working Paper Series 2926, European Central Bank.
    6. David Argente & Esteban Mendez & Diana Van Patten, 2026. "Cross-Border Product Adoption: Individual Imports, Migrant Networks, and Domestic Retailers," Cowles Foundation Discussion Papers 2522, Cowles Foundation for Research in Economics, Yale University.
    7. Francisco J. Buera & Nicholas Trachter, 2024. "Sectoral Development Multipliers," NBER Working Papers 32230, National Bureau of Economic Research, Inc.
    8. David Argente & Esteban Méndez-Chacón & Diana Van Patten, 2026. "Cross-Border Product Diffusion," Documentos de Trabajo 2603, Banco Central de Costa Rica.
    9. Federico Cannerozzi & Giorgio Ferrari, 2024. "Cooperation, Correlation and Competition in Ergodic N-player Games and Mean-field Games of Singular Controls: A Case Study," Papers 2404.15079, arXiv.org, revised Apr 2025.
    10. Giulio Cornelli & Jon Frost & Jonathan Warren & Clair Yang & Carolina Velásquez, 2024. "Retail fast payment systems as a catalyst for digital finance," BIS Working Papers 1228, Bank for International Settlements.
    11. Jodi Dianetti & Giorgio Ferrari & Yunzhi Hu & Hao Xing, 2026. "Latent Fragility and Clustered Withdrawals in Dynamic Banks Runs," Papers 2607.22317, arXiv.org.

    More about this item

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:21211. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.